Under what circumstances is a 'Carls' customer, as the Indemnifying Party, obligated to defend, indemnify, and hold harmless Olo and its officers, directors, and employees?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Additionally, Customer shall defend, indemnify and hold harmless Olo and and its officers, directors and employees (each, an
- "Indemnified Party") from all third-party claims and liabilities (including reasonable outside attorney'sfees) arising out of or relating to (i) any action against Olo arising out of any Customer Third Party Provider's disclosure or misuse of Customer Data or related to Olo's release of such Customer Data, including PII, if the release of such information was requested in writing by Customer; (ii) Customer's failure to properly collect and remit taxes or other government payments or fees associated with its usage of the Services, which shall be the sole responsibility of the Customer and, if applicable, the Authorized Operators; and (iii) the transfer of Customer Data by any means not recommended or deemed reasonably secure by Olo.
The Indemnified Party must (a) promptly notify the Indemnifying Party in writing of any third-party claim (provided that a failure to promptly notify will not relieve the Indemnifying Party of its indemnification obligations, except to the extent it has been prejudiced by such failure); (b) reasonably cooperate with the Indemnifying Party in the defense of the matter; and (c) give the Indemnifying Party primary control of the defense of the matter and negotiations for its settlement.
The Indemnified Party may, at its own expense, join in the defense with counsel of its choice.
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, as a customer, the Indemnifying Party, is obligated to defend, indemnify, and hold harmless Olo and its officers, directors, and employees from all third-party claims and liabilities, including reasonable outside attorney's fees, under specific circumstances. These circumstances include claims arising out of or relating to (i) any action against Olo arising out of any Customer Third Party Provider's disclosure or misuse of Customer Data or related to Olo's release of such Customer Data, including PII, if the release of such information was requested in writing by Customer; (ii) Customer's failure to properly collect and remit taxes or other government payments or fees associated with its usage of the Services, which shall be the sole responsibility of the Customer and, if applicable, the Authorized Operators; and (iii) the transfer of Customer Data by any means not recommended or deemed reasonably secure by Olo.
This means that if a Carls franchisee uses a third-party provider who misuses customer data, or if the franchisee requests Olo to release customer data in writing, and Olo complies, the franchisee is responsible for defending and covering Olo's costs related to any resulting claims. Similarly, the franchisee is responsible if they fail to properly handle taxes or transfer customer data insecurely.
Carls franchisees should ensure they have robust data protection and tax compliance systems in place. They should also carefully consider the security implications of any data transfer methods they use. Franchisees must promptly notify Olo in writing of any third-party claim, reasonably cooperate with Olo in the defense of the matter, and give Olo primary control of the defense of the matter and negotiations for its settlement. The franchisee may, at its own expense, join in the defense with counsel of its choice.